European stocks fall after Greece downgrade

Standard Chartered, Publicis benefit from broker upgrades

SimonKennedy

LONDON (MarketWatch) — European stocks fell on Friday and posted a loss for the week, as Fitch Ratings downgraded Greece’s credit rating, rekindling euro-zone debt worries.

The Stoxx Europe 600 index (STOXX600) slipped 0.1% to end at 279.65. For the week, it dropped 0.3%.

Equities in Greece, Spain and Italy fell sharply after Fitch cut Greece’s rating to B-plus from BB-plus, citing “the scale of the challenge” facing the nation in implementing reforms to secure its solvency.

Europe's week ahead: Obama, G-8

(2:00)

President Obama will visit Ireland and the U.K. next week, and attend the Group of Eight summit of world leaders in Deauville, France.

In Athens, the ASE Composite (COMPO) dropped 1.9%. Shares of gambling firm OPAP fell 4.3% and those of National Bank of Greece
NBG, +5.60%
fell 2.3%.

BP shares gain

In London, the FTSE 100 index (UKX) slipped 0.1% to 5,948.49, as shares of Lloyds Banking Group PLC (LLOY)
LYG, -2.77%
dropped 2.9% after being downgraded to neutral from buy at Goldman Sachs.

Shares of BP PLC (BP.)
BP, -1.88%
gained 2.7% after the oil giant said it’s reached a settlement with Moex Offshore 2007 LLC, which had a 10% interest in the Macondo oil well. BP said Moex will pay $1.065 billion after recognizing that the Deepwater Horizon disaster in the Gulf of Mexico was the result of mistakes by multiple parties. Read more on BP’s Macondo settlement.

Shares of emerging-markets-focused bank Standard Chartered PLC (STAN) climbed 1.1% after it was upgraded to buy from neutral at UBS. The broker said the interim report of the U.K.’s Independent Commission on Banking has “closed off worst-case outcomes in U.K. regulations.”

Peter Dixon, strategist at Commerzbank, said markets have effectively been range-bound for around six weeks as positive earnings announcements have offset uncertainty over the sovereign-debt situation.

“Investors don’t think it’s the right time to sell equities, but they are wary of taking on additional risk at a time when there are so many things going on in the global economy,” Dixon said.

“We’re continuing to see conflicting messages out of the euro zone with regard to Greece, so it’s not surprising that investors are keeping their powder dry,” he added.

Publicis, Technip rise

The French CAC 40 index (PX1) sank 0.9% to end at 3,990.85, as shares of Michelin (ML) fell 1.7%.

Shares of French advertising firm Publicis Groupe SA (PUB) climbed 0.5% after the stock was lifted to overweight from neutral at HSBC.

The biggest climber in Paris was Technip SA (TEC), which rose 1.1%. The engineering and construction group, along with Samsung Heavy Industries Co., will build a natural-gas facility for Royal Dutch Shell PLC (RDSA)
RDS.A, +0.19%
Shell shares fell 1% after the firm’s board confirmed it would fund the project.

On the downside in Paris, Sanofi-Aventis SA (SAN) fell 1.3%. The pharmaceutical firm said the French authority that oversees reimbursements for medicines is reviewing the company’s Multaq drug.

In Germany, the DAX 30 index (DAX) dropped 1.2% to end at 7,266.82. Shares of industrial conglomerate Siemens AG (SIE)
SI, -8.33%
fell 2.2% after an arbitration court ruled it should pay Areva SA (CEI) 648 million euros ($928 million) plus interest because it didn’t fully meet obligations in exiting a joint venture between the two companies.

Rounding out Friday’s European movers, shares of Mitchells & Butlers PLC (MAB) slumped 5.2% in London. The pub and restaurant operator reported a 40% drop in first-half pretax profit and said it expects to face challenges from rising food and energy prices.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.